Twitter to Ad Competitors: Go Pound Sand

Twitter said today that it will no longer allow third-party ads to be injected into users’ Twitter timelines. The ban is particularly interesting given it’s almost exactly what the company’s own recently announced advertising platform, Promoted Tweets, does — insert paid and relevant tweets into timelines (as well as search results pages). Fresh off the heels of developer anger and confusion over Twitter’s unexpected efforts to launch and acquire mobile clients last months, the news was carefully laid out in a long blog post by Twitter COO Dick Costolo.

To be clear, Twitter will continue to allow developers to display ads around user timelines. And further, many developers already don’t include ads within streams, knowing that Twitter monetization is a touchy and evolving topic, even if the company had not previously formally clarified its stance. Costolo said he expected today’s API terms of service changes to negatively impact “a few” companies. One seeming target: Ad.ly, which bills itself as “an in-stream advertising platform that matches top-tier Twitter publishers with top-tier brands.”

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Costolo explained in the blog post that Twitter’s decision hinges on the concept of near-term vs. long-term monetization opportunities (he used some variation of those terms at least nine times). Costolo said Twitter wants to protect user value and the health of its platform, while “Third party ad networks may be optimized for near-term monetization at the expense of innovating or creating the best user experience.”

Twitter’s Promoted Tweets, meanwhile, are displayed “in a manner that preserves the integrity and relevance of the timeline,” Costolo said.

Twitter shares half of the revenue collected for Promoted Tweets with developers who display them. Costolo justified that share by saying Twitter pays for maintaining its network, fighting spam, scaling the service, supporting users and paying its staff of 200 (and growing). He said there continue to be opportunities to build on top of Twitter, including “third-party monetization engines,” as well as metadata around tweets, vertical clients, and analytics.